Channel 4's executive pay leaps

Channel 4's chief executive, Andy Duncan, saw his pay almost double to £1.21m last year as he collected a three-year loyalty bonus and enjoyed a salary hike of more than 40%.

Duncan also signed up to a new loyalty scheme that will pay out £450,000 next year, while director of television Kevin Lygo collected £350,000 in January to reward him for staying at the broadcaster.

Lygo's salary has also rocketed from £443,000 to £750,000, reflecting his promotion from director of programming to director of television and content last year.

Channel 4 detailed the payments in its 2007 annual report, which was published today.

Duncan's pay – at £1.21m almost twice his £622,000 remuneration in 2006 - included £650,000 in salary, up from £460,000 in 2006. He also collected a £98,000 bonus and £13,000 in benefits.

In July 2007, Duncan picked up a £450,000 payment for staying with Channel 4 for three years, an incentive put in place to avoid a repeat of his predecessor Mark Thompson's 2004 defection to the BBC.

Channel 4 said today he had entered into a new two-year loyalty scheme at the increased rate of £225,000 a year that will pay out in July 2009.

Lygo's additional bonus scheme was designed to prevent him joining rivals such as ITV, and paid him £350,000 on January 31 this year to reward him for staying at Channel 4 from August 2005 until that time.

The director of TV and content was paid a total of £888,000 last year, an increase of 48% on his pay of £598,000 last year.

Lygo's salary jumped 69% to £750,000 - £100,000 more than Duncan's – and he also pocketed a £125,000 bonus and £13,000 in benefits.

The Channel 4 finance director, Anne Bulford, has also joined a loyalty scheme.

Bulford can earn up to 30% of her salary in bonuses over the next three years if the corporation hits targets and she is still in place in April 2010.

Last year she was paid £400,000, with a £331,000 salary and a £56,000 bonus.

Sales director Andy Barnes made a total of £438,000, while new business director Rod Henwood, who resigned on December 17, was paid £311,000.

Channel 4 said its executives' salaries and benefit packages were "established by reference to those prevailing for executives of comparable status in the television and wider media industry, but without any of the share option schemes available to most of Channel 4's competitors".

The cap on bonuses was reduced from 30% of salary to 20% last year to reflect Channel 4's part in the industry-wide premium-rate phoneline scandal.

Last year Ofcom fined Channel 4 a total of £1.5m for misconduct in the Richard & Judy viewer contest You Say We Pay and a Deal or No Deal phone-in.

Today's report also showed that Luke Johnson, the channel's chairman, earned £73,000 for his services last year.

Johnson defended Duncan's loyalty bonus: "There's a great deal of change going on in the media industry because of technology, so it's important there's continuity in management at the top.

"Overall during the tenure of his job Andy's done a good job in delaying the inevitable, if you like, in terms of declining share and revenues.

"We're a commercial operator in a competitive market place so have to pay salaries similar to those of other organisations.

"We need the best talent available both onscreen and organising the corporation. Organisations like Sky and other comparable media businesses pay more."

When it was pointed out that Sky is not asking for assistance or subsidy from the public purse, Johnson added: "Sky don't have a public service broadcasting obligation and we feel that if the public, if viewers value those they come at a very significant cost and Sky's operating to maximise profits.

"We are a very creative organisation and that requires a great deal of investment."

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